The Philippine Railway Company in Cebu

Spain being one of the early empires of the world was abreast of modernization. Animal-driven carriages were replaced then by locomotives and the train. The Philippines being a colony of Spain was the beneficiary of the industrialization of Europe. The Spanish government through its Governor General in the Philippines who acted as the representative of the Spanish King established the railway systems on November 24, 1892. It was primarily implemented in the central government which is Manila.

When the Americans arrived and replaced the Spaniards as colonizers of the Philippines, the Insular Government of the Philippines, an American sponsored conglomeration of Filipino and American leaders established the Philippine Railway Company on March 5, 1906.

Then on May 28, 1906 the Philippine Commission granted concession to the Philippine Railway Company for the construction of the railways in Panay, Negros and Cebu.

The Philippine Railway Company virtually monopolized the public transport system in Cebu though they were tartanillas (horse-driven carriage) its scope was only in the urban areas and was for short distance travel.The train system covers the Municipality of Cebu (now Cebu City) to Argao, for the southern part and Danao for the northern part.

That was the situation for decades it was changed with the entry of the autobus and trucks. Cebu was the battleground for domination of the political and business giants, the Cebu Autobus of Don Sergio Suico Osmeña and Bisaya Lines of Don Mariano Jesus Cuenco.

The Philippine Railway Company was dying because of the competition thus on April 8, 1932, R.R. Hancock, Vice President and General Manager of the Philippine Railway Company filed with the Public Service Commission (there was yet no Land Transportation Office and the Land Transportation and Franchising Regulatory Board) to be given authority to alter the freight rates of their trains. The area was for Cebu and Panay. The complaint of the Philippine Railway Company was that freight as well as passengers was handled by road trucks and auto buses without regard to any regulation or law, they run up and down the highways and into the station grounds bargaining for every piece of freight and every passenger.

The set up was that the charges were primarily based on the railway rates. The trucks on the other hand go to a shipper and ask that what the railway charges, and then offer to haul the freight at a few centavos less per bulto or ton.

The Philippine Railway Company argued that their rate being fixed it has no chance to secure the freight as against the trucks and buses. It was proposed by the Philippine Railway Company that the present rates will be considered the maximum, and that they could fix other lower rates whenever in its opinion it will be to the advantage of the company to do so.

The petition of the Philippine Railway Company was opposed by the Cebu Autobus Company on May 28, 1932 arguing that the company holds a certificate of public convenience to operate an autobus for the transportation of passengers and freight between all the principal points in the Province of Cebu. That the sliding rate proposed by the railway is against the fundamental principles of the Public Utility Regulations.

The commission after hearing the opposition of Cebu Autobus Company and the Panay Autobus rendered a decision on June 21, 1932 granting authority to the railway the power to alter its rates.

The case reached the Supreme Court who on February 17, 1933 reversed the decision of the Public Service Commission who said that it is the duty of the latter to correct the conditions complained by Hancock of the PRC by enforcing the law and its orders as to those operators responsible, and not by delegating its powers to the Philippine Railway Company and authorizing it to reduce its rates, whenever necessary to meet such unlawful competition.